Progressive Demand: “Robust, Long-Term” Transportation Funding

July 14, 2014

Isaiah J. Poole

The House is scheduled to begin debate Tuesday on a short-term patch to get past an election-season crisis on federal transportation funding, but the Campaign for America’s Future sent a letter to members of Congress today calling on them to “quickly renew robust, long-term funding for the Highway Trust Fund.”

This comes as the White House released a new report making the case for precisely that kind of approach to the nation’s transportation needs.

“At a time when unemployment is still too high, Americans strongly support needed public investments in the roads, bridges, public transportation, ports and airports that are essential to American prosperity,” CAF’s letter to Congress says. “Today, Congress should be addressing one very important part of those investment needs: renewing funding for key transportation projects by making sure the Highway Trust Fund doesn’t run out of money.”

That fund, which is financed through a gasoline tax, is on pace to run out of money as early as the end of the month. The Department of Transportation has warned state governments that once that happens, it will have to sharply curtail disbursements from the trust fund. That would put hundreds of currently active highway and public transportation projects at risk.

That has prompted both houses of Congress to come up with short-term fixes that would carry the government into the middle of next year, when presumably Congress would have come to an agreement on a longer-term plan.

But some of these fixes, like a “pension smoothing” allowance that essentially allows corporations to underfund their pensions so that the proceeds can be taxed, have raised some eyebrows. In any event, as the letter goes on to say, Congress should pay for infrastructure funding “through responsible tax plans” rather than “destructive and unworkable gimmicks” – singling out as an example a widely panned idea of allowing corporations that have parked profits overseas to avoid taxation to bring back or “repatriate” those profits at a deeply discounted tax rate if they purchase a proportionate share of infrastructure bonds.

The letter does not endorse a particular funding plan, but it said “acceptable” ways to replenish the Highway Trust Fund would include a plan by Rep. Chris Van Hollen (D-Md.) to limit the ability of U.S. corporations to use mergers with foreign corporations to limit their U.S. taxation, and a Senate proposal backed by Sens. Chris Murphy (D-Conn.) and Bob Corker (R-Tenn.) to increase the gasoline tax to reflect inflation since the last time it was raised in 1993.

The report says that “65 percent of America’s major roads are rated in less than good condition, one in four bridges require significant repair or cannot handle today’s traffic, and 45 percent of Americans lack access to transit.” The resulting congestion costs households “$120 billion in extra fuel and lost time” and businesses “$27 billion a year in extra freight transportation costs, increasing shipping delays and raising prices on everyday products.”

One key benefit of a robust infrastructure program would be “many thousands of jobs” over “a wide variety of different industries.” Nearly seven out of 10 would be in the construction sector, a portion of the job market where unemployment over the past year has averaged close to 10 percent. But one in 10 would be in manufacturing and the remaining 20 percent would be divided among retail trade, professional services and other jobs.

The report includes one little-noted but compelling reason for Congress to act now on a long-term transportation plan: Spending the money now is actually the most cost-effective and hence fiscally conservative option. “Construction costs for highways have declined more than 20 percent since before the 2007 recession and have been relatively flat since 2011. Moreover, 20‐year bond yields remain below pre‐recessionary levels,” the report said, “but as the economy continues to recover and prices begin to rise, higher construction costs and bond yields will likely follow.”

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About Isaiah J. Poole

Isaiah J. Poole is communications director of People's Action, and has been the editor of OurFuture.org since 2007. Previously he worked for 25 years in mainstream media, most recently at Congressional Quarterly, where he covered congressional leadership and tracked major bills through Congress. Most of his journalism experience has been in Washington as both a reporter and an editor on topics ranging from presidential politics to pop culture. His work has put him at the front lines of ideological battles between progressives and conservatives. He also served as a founding member of the Washington Association of Black Journalists and the National Lesbian and Gay Journalists Association.